High street estate agents have come under fire for not letting sellers switch agents more easily.
By contrast, online agents are highlighted for allowing vendors to walk away.
A blog on the Home Owners Alliance website says: “If you’re with an online agent which often ask you to pay upfront or after a certain amount of time, and want to swap provider, in most cases you can walk away, albeit having lost the £500 or so you paid to advertise with them.
“In fact one agency, eMoov, have just introduced a no sale no fee approach. So if you don’t like the service you can walk away without losing money.
“With high street agents it can be more difficult to cut your ties.
“There is no law stopping you switching estate agents. But too many agents have one-sided anti-home owner contracts that make it extremely difficult, slow or expensive to switch.
“It leads to huge legal conflicts between home owners and their estate agents, who often end up suing the home owner.
“It is probably the biggest single source of complaints that we get from our members, and we spend much of our days helping members sort out disputes with their agents.
“It stops competition working within the estate agent business (which presumably is the point) and makes the home selling experience much more fraught than it should be.
“We have seen cases where a home owner’s life is on hold for months until they can safely switch from one estate agent to another one, or are at risk of getting a lower price than they should for their home because they have to pay estate agents twice.”
The blog argues: “How much you get for your home arguably depends on how good your estate agent is, but if they are not up to scratch, how easy is it to switch them?
“The answer is – it is often almost impossible. This means that home owners are often left trapped with a terrible agent in the biggest transaction in their lives – and the government are doing nothing about it.”
The blog says agents make it difficult for vendors to switch by lengthy tie-ins of often two months, and up to 26 weeks. It says there should be a maximum period of six weeks.
It says agents also make switching harder by insisting they get a share of the commission after the vendor goes to a new agent if the eventual buyer was “in contact with the first agent at any point”.
The blog goes on: “This is an almost ubiquitous clause in estate agents’ contacts, and they justify it by saying that if they introduce the person (even if they don’t actually sell the house) then they should get a fee.”
It says both long tie-ins and the charging of double fees should be banned.
[EYE’s note: In 2008, in Foxtons v Pelkley Bicknell a seller was sued by Foxtons for its commission because the firm said it had introduced a buyer, who was successfully reintroduced by a second agent, Hamptons. The Appeal Court ruled that it was no longer enough to introduce a buyer to a property. The buyer had to be introduced to the sale. As Foxtons had not introduced the buyer to the sale, they were not entitled to their fee. In other words, for an agent to be entitled to payment of their commission, they must show that they were the effective cause of the completed transaction.]
The full blog is here
Contract law can cover this as if any part of a contract is considered to be unfair or unreasonable,it may well be that it would render the contract null and boid. The problem for consumers is they are afraid to take the fight to the courts.
Sellers should be be STUCK with their agents ONLY because of Outstanding Customer Service, not a complex, unfair contract.
Sadly what causes difficulties for honest and fair agents is that if they allow their clients total freedom,there are so many aggressive pushy agents out there we work hard exploiting this loophole to get their foot in the door.
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Well said Typhoon
If an agent (or service provider) doesn’t do what they promised on the label then I’m sure consumers would gain Trading Standards support to more on to an agent who can do what they promise.
One past problem was baiting sellers by over promising expectations, ie masses of viewers, substantially higher offers etc.
Equally if an agent delivers what they promise, then what’s the problem?
Afterall, how long is most peoples mobile phone contract???
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Err of course they will let you switch easily, in fact they want you to. They’ve got your internet listing fee so the less work they have to do going forward the better.
It is a business model based on volume listing not service, not sales; ‘cough up and clear off’…. No income tax, no V.A.T., No money back, no guarantee, Black or white, rich or poor, We’ll cut prices at a stroke…… God bless Hooky Street, Viva Hooky Street
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Whats the difference between this and agents who do not a stroke for 3-6 months on the property they’ve “listed” , then charge the vendor a hefty market removal fee when they want to switch agents, im not sure I get your point Robert ?
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Hefty market removal fee? sorry never come across that in 29 years.
Where is that practice going on? I can’t understand how the professional and proper estate agents in the area are failing to control that as a competitive practice. Where are you Danny?
No agent can afford to have unsaleable stock on their books there is no incentive to do nothing? Good agents will actively make sure ‘that’ sort of vendor or property is on with someone else.
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How about Connells?
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With a moniker of Agencyinsider I would have expected you to understand and answer your own question. Connells is a salary staffed agency rather than a commission staffed one [the difference between corporate and independent] the income structure to pay wages is different, the objectives are different. It is a difference as subtle as that between Rightmove and Zoopla and OTM.
If Connells are doing it it doesn’t surprise me, selling houses is the loss leader for FS leads. If Skipton were smart they would do what Black Horse Agencies have done.
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You said that in 29 years you had never come across a hefty market removal fee. I was just drawing attention to the Connells practices in this regard. I don’t think a vendor would care tuppence for the internal setup of the firm. They would however care that they could be faced with ‘admin’ charges on withdrawal.
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That is the point vendors ought to be aware that independent agents starve if they don’t perform, corporates can sit there playing Call of Duty until HR catch up with them.
Withdrawal fees and withdrawal conditions are an obvious admission of under-performance in the past. If nothing else they indicate what the fixed costs of an Agency is. I’d use that against any competitor who tried it.
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Not to be a pain, but near me are Keith Clough, independent, very poor mind you, £299+vat withdrawal regardless of time.
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I seem to remember some anonymous screed recently making a point that vendors are quite capable of choosing the right estate agency and need no help in that quarter. HOA apparently disagree.
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and that makes it right does it? one blog? I think your being mentally obese there….
If someone were to venture an opinion that your business model was rubbish, would that also be right?…
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Didn’t say it was right or wrong! Just passing a comment that HOA and apparently a few of the contributors here feel vendors need some direction. And, if you were to venture an opinion on our business model, we wouldn’t mind because your opinion doesn’t matter to us.
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To be honest if I had a property I could not sell I would be happy for them paying me £500 so they can walk away!
It does make me chuckle. We spend a lot of time and money marketing property and we do not charge a penny upfront. And still people moan!
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‘It leads to huge legal conflicts between home owners and their estate agents, who often end up suing the home owner.‘ Really? How many of us EYE readers have ever sued a client for walking away from the agency agreement? (I mean that in terms of the basic contract not in relation to recovery of marketing costs etc). Never in my experience. Sounds like sensationalism to me.
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“In fact one agency, eMoov, have just introduced a no sale no fee approach” quoted Home Owners Alliance.
Apparently, if you are rude to them they shut up.
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Unless of course you choose Pay Setter “their most popular option” in which case you do pay a cancellation fee!
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I think 6 weeks is about right, the vendor will have an idea of the company their dealing with in that time and if it’s not sold then they can issue one weeks notice at any point. I appreciate that this may vary dependant on location.
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Morning Paul.
We don’t have any other than a simple 14 days written notice requirement (so I suppose you could argue we hold em for 14 days), which in theory starts the moment after the 14 Right to cancel ends…. , employ us today and sack us tomorrow if we do not perform.
I’ve become very focused on the fact that if you list the house well ie set the right expectations without any false promises and then you service your stock well – people will stick with you. Eventually the results matter, but then what agent lists a house with the intention not to sell it.
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Couldn’t agree more Ric. We’ve had an open-ended contract with no tie-in for a good few years. All sellers have to do is 2 weeks notice to terminate. If your service is good enough they wont want to leave anyway. It’s a great instruction getter but you have to back up your words with the appropriate action.
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ditto, completely agreed.
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Morning Ric, seems like a sound approach and puts control in the hands of the seller…”instruct us and dump us if we don’t live up to our promises”..I bet it’s a real instruction winner and hazard a guess that you win far more than you lose, especially if the comp are asking for a much longer contract.
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afternoon Paul.
You do win more than you lose. Eventually the odd one falls for the promises of those touting agents. That said I lost 2 completely (ie not joint) about 12 weeks ago and got them both back last month back on sole agency both saying whilst neither of us sold it, the difference in service was astonishing…. I think Fluter summed it up in saying “you have to back up what you promise” and not many do as they are too busy touting the next one.
Patience in this game in my opinion, the good agents will always rise to the top.
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I’m no longer a sales agent but when I was I recall that one reason for long sole agency agreements being introduced was to counter the unrealistic prices that vendors wanted to ask to “test the market”. If the price is right the property will sell, if it’s wrong the agent invests time and money for no return and there are no winners. If it was me, I would encourage all vendors to go to a no-sale no fee online agent at an unrealistic price for 6 weeks then go to a high street agent for real advice and to sell the property – see how long online agents can survive without fee incomes.
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I never took on anything that wasn’t immediately saleable, anything that was overpriced was allowed to go to another agent for 6 weeks and then come on with me @3% multi agency. It was a system that worked for me, the vendor and the applicants. The only ones to suffer was any agent daft enough to list unsaleable instructions.
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Think the landscape has changed Robert.
In this market its worth taking an “Overpriced” property and trying to appease the seller for a month or two as the market is growing that rapidly in some parts of the country. I remember the days of 3% if only we could still get that luck to get 2% multi now and that’s noway the norm
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There’s a calculable difference between overpriced and not immediately saleable, the difference being knowing how long till overprice is the right price. That bit of the landscape hasn’t changed.
For sure the fee% have changed but so have achieved prices, rents and wage bills etc. The principles of competitive agency haven’t.
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Contractually I have no tie-in at all. If a client signs up this morning and wants to leave this afternoon, they can!
I detested long tiny print corporate contracts so the moment I went indepedent I vowed to contractually offer total freedom to walk away.
It works perfectly and re-affirms the old-fashioned approach to estate agency works just fine in this overblown psuedo digital dependent world that many try to convince us is the be all and end all!
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Absolutely correct! I’m not as easy as you – we have a 7 day get-out but this is just the sort of thing government wants to stay away from and leave open competition – unfortunately. I do wonder how many clients actually read the contract first??? Agents here – Haarts have a 20 week contract with 4 weeks notice. That is 6 bl**dy months to sit on your behind!
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“… we have a 7 day get-out…”
I take it that you are not referring to the minimum required ‘cooling off’ period under current Legislation, newsboy – but to your termination period from Day 15 onward?
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If it wasn’t for aggressive and underhand touting none of us would need a tie in period. Having said that where I work, (the wild west) contracts mean nothing to touting agents and I have never seen the ”liable for two fee’s” disclaimer in any tout material ever.
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We have had agents in the past actually use the above “Foxton’s Ruling” to try and get vendors to break contracts!
This is another reason we started using sole selling rights contracts.
Lucky most vendors are decent human beings and tell them where to go.
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Hi smile please. I want to apologise – for something I didn’t do.
I was going to ask you a teensy-weensy favour – that the next time you were down the other pub having a bit craic with the Landlord and if you were feeling a bit vexation you would have dropped into the conversation that I reckon he is spouting complete and utter ******** from his cosy protected position behind the bar… but that in my opinion he is insulting the intelligence of your goodself and anyone else unfortunate enough to have read it with his latest wave of noxious, agenda-laden spin.
But I thought better of it. I wouldn’t want you to feel obliged to do my dirty work or awkward to refuse; nor would I want to miss out on the opportunity to tell him myself.
I’m sure that somehow he will get the message
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Jumping on this a bit late, but here’s my two cents anyway. I think this depends on which area of the country you’re in. I have 20 week sole agency agreement with 14 day notice period, No Sale, No Fee after. I.e. you could serve notice at 18 weeks and incur no cost.
This is in line with our average sale time in North Lincs, of which we have the shortest average in the area. We do not sit on our a***s for that time and the fact is not every house will sell quickly.
My tie in allows me and my staff to work on a sale over a few months. Without having to overcome the hurdle of being constantly touted by agents purely offering low cost services when a house hasn’t sold in one month.
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I just had a vendor complain about the length of our contract, 26 weeks but we are in a rural community we don’t have thousands of buyers on our doorstep like a London agent so we have to work to a different time scale or short sell the property.
The salt in wound on this is
A) we caved in and let them go early
B) They put the house on with another agent at a fraction below an offer we received and they refused.
They say you cant educate pork, I say if you sign them up to 26 weeks and they don’t like it well they should have thought about it before they signed, particularly as the client in this case was a professional landlord.
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